FAQ – Frequently Asked Questions about Section 8 Company Registration in India
1. What is a Section 8 Company?
A Section 8 Company is a non-profit organization established under the Companies Act, 2013 in India. Its primary objective is to promote social welfare, charitable activities, or any other useful purposes that can benefit society.
2. How is a Section 8 Company different from other types of companies?
Unlike other companies, a Section 8 Company does not have the objective of earning profits for its members. Its primary goal is to work for the welfare and benefits of the community. Any profit generated by the company is reinvested towards promoting its objectives rather than being distributed among the members.
3. What are the benefits of registering a Section 8 Company?
Registering a Section 8 Company in India provides several benefits, such as tax exemptions, access to various government schemes, and opportunities to receive grants and donations. It also enhances the credibility of the organization and provides legal status for undertaking charitable activities.
4. Who can register a Section 8 Company?
Any individual or group of individuals, including foreign nationals, can register a Section 8 Company in India. However, at least two individuals must come together to form the company, and it should have a minimum of three directors.
5. What are the requirements for registering a Section 8 Company?
To register a Section 8 Company, the following requirements must be fulfilled:
– Minimum of two shareholders and three directors (shareholders and directors can be the same individuals).
– At least one director should be a resident of India.
– A registered office address in India.
– A unique name for the company that is not already in use.
– Memorandum and articles of association outlining the proposed activities of the company.
– Submission of necessary documents and forms to the Registrar of Companies.
6. How long does it take to register a Section 8 Company?
The registration process typically takes around 20 to 30 days after all the required documents are submitted and verified. The exact duration may vary depending on the processing time taken by the Registrar of Companies and any additional information or clarifications needed.
7. Can a Section 8 Company earn profits?
Although a Section 8 Company is primarily focused on promoting charitable purposes, it can generate profits as a by-product of its activities. However, these profits must be reinvested in furthering the objectives of the company and cannot be distributed among the members.
8. What are the compliance requirements for a Section 8 Company?
A Section 8 Company must ensure compliance with various statutory requirements, such as annual filing of financial statements and annual returns with the Registrar of Companies. It also needs to maintain proper books of accounts and follow the provisions of the Companies Act, 2013.